Anti-Terrorism Act (ATA) exposure has surged over the past year, driven by the increase of Foreign Terrorist Organization (FTO) listings in Latin America and expanded legal theories in circuit courts. A recently filed complaint brought another development for multinational corporations operating in high-risk jurisdictions.
On January 29, 2026, a new ATA complaint was filed in the Eastern District of Virginia, Nahadi v. British American Tabacco P.L.C. The complaint, which represents over 100 representatives of victims injured or killed in two Iranian missile attacks in Iraq, alleges that British American Tabacco’s (BAT) operations in North Korea financed these terrorist efforts.
The Nahadi complaint also pushes a theory that some courts have rejected: that a company’s disclosed sanctions-evasion conduct can ground responsibility for downstream terrorist attacks. The case likely raises questions about alleged “irregular” conduct under the ATA following criminal settlements with US authorities.
Background
Nexus
The Nahadi complaint alleges that BAT and its subsidiary, BAT Marketing Singapore (BATMS), operated a shadow enterprise with a North Korean government-owned entity between 2007 through 2017. The complaint characterizes the scheme as deliberately covert, pointing to BAT’s public statement that it had exited North Korea’s market.
The complaint alleges BAT’s joint venture in North Korea generated hundreds of millions in revenue, and that those proceeds were routed to joint weapons enterprises between North Korea, the Islamic Revolutionary Guard Corps (IRGC), and Hezbollah. The complaint cites North Korea’s decadeslong collaboration with the IRGC and Hezbollah on missile and ricket programs, and argues that BAT’s funding was vital for developing, securing and stockpiling the specific missiles used in the Iraq attacks.
Sanctions Violations
Plaintiffs highlight admissions in BAT’s and BATM’s 2023 plea deal and deferred prosecution agreement with the Department of Justice (DOJ) and the Office of Foreign Assets Control (OFAC). In resolving North Korea-linked bank fraud and sanctions violation charges, BAT and BATSM stipulated that they generated hundreds of millions of dollars through their North Korea venture, willfully violated US sanctions, and engaged in a conspiracy to commit violations. These admissions, the plaintiffs argue, establish the “substantial assistance” and “general awareness” requirements of ATA liability.
Venue
While historically, most ATA cases have been filed in federal courts in the District of Columbia and New York, plaintiffs in Nahadi filed suit in the Eastern District of Virginia. Two factors are likely to account for the choice of venue. First, the Eastern District of Virginia has reputation for expedited case management. Second, plaintiffs may have opted to file outside of the Second Circuit in light of the July 2025 Ashley decision, which declined to impose ATA liability on several financial institutions despite allegations that they were aware that banking services were being used for improper purposes.
ATA Liability
Under the Justice Against Sponsors of Terrorism Act (JASTA), plaintiffs can pursue secondary liability by plausibly alleging that the defendant was generally aware it was playing a role in terrorist activity, the defendant knowingly provided substantial assistance to the FTO, and the resulting attack was foreseeable.
Following the Supreme Court’s decision in Taamneh, recent circuit decisions applying JASTA have sharpened the line between attenuated, “ordinary course” services and consciously culpable assistance tied to terrorist attacks. The Second Circuit has narrowed the aperture, concluding that secondary liability is not supported for remote and “business-as-usual” operations. But the DC Circuit keeps the door open where plaintiffs plausibly plead unusual operations (e.g., bribes/off-the-books goods) with a nexus to terrorist attacks.
The DC Circuit likely sits in tension with the Second Circuit. Thus, it remains to be seen how district courts outside of these circuits will apply the emerging case law.
Implications for Multinational Entities and Executives
Secondary liability is a fact-intensive tightrope. In sanctioned and conflict-affected markets, multinational operations are increasingly scrutinized for their corporate structures, supply chain nodes, and downstream revenue distribution. Plaintiffs also point to an entity’s sophistication to allege that it should have known that operations in a high-risk zone would foreseeably connect business operations to terrorist activity.
The Nahadi complaint, grounded in BAT’s own admission and prior sanctions penalty, underscores this trend. Whether the Eastern District of Virginia will treat admissions of “willful disregard” for US sanctions as sufficient to plead “knowledge” for JASTA secondary liability remains to be seen – that kind of allegation is widely regarded as insufficient, which did not stop plaintiffs from filing here.
As the 10th anniversary of JASTA approaches in September 2026, Freshfields anticipates more filings like the Nahadi complaint. You can find the Nahadi complaint linked here.
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